The Darien Scheme was an unsuccessful attempt by the Kingdom of Scotland to become a world trading nation by establishing a colony called "Caledonia" on the Isthmus of Panama on the Gulf of Darién in the late 1690s. The aim was for the colony to have an overland route that connected the Pacific and Atlantic oceans. From the beginning the undertaking was beset by poor planning and provisioning, divided leadership, lack of demand for trade goods, devastating epidemics of disease, and failure to anticipate the Spanish Empire's military response. It was finally abandoned in March 1700 after a siege by Spanish forces, which also blockaded the harbour.[1]

As the Darien company was backed by 25–50% of all the money circulating in Scotland, its failure left the entire Lowlands almost completely ruined and was an important factor in the subsequent Act of Union (completed in 1707). The land where the Darien colony was built is virtually uninhabited today.

The late 17th century was a difficult period for Scotland. The country's economy was relatively small, its range of exports very limited and it was in a weak position in relation to England, its powerful neighbour (which it was in personal union with, but not yet in political union). In an era of economic rivalry in Europe, Scotland was incapable of protecting itself from the effects of English competition and legislation.[2] The kingdom had no reciprocal export trade and its once thriving industries such as shipbuilding were in deep decline; goods that were in demand had to be bought from England for sterling. Moreover, the Navigation Acts further increased economic dependence on England by limiting Scotland's shipping, and the Royal Scots Navy was tiny.[2]

Several ruinous civil wars in the late 1600s had exhausted the people and diminished their resources. In the 1690s "seven ill years" saw widespread crop failures, which brought famine. The deteriorating economic position of Scotland led to calls for a favourable political union, or at least a customs union, with England. However, the stronger feeling among Scots was that the country should become a great mercantile and colonial power like England.[2]

The Darien chest, which held the money and documents of the Company of Scotland

In the face of opposition by English commercial interests, the Company of Scotland raised subscriptions in Amsterdam, Hamburg and London for the scheme.[4] For his part, King William III had given only lukewarm support to the whole Scottish colonial endeavour.[a] England was at war with France and hence did not want to offend Spain, which claimed the territory as part of New Granada.[6]

England was also under pressure from the London-based East India Company, who were keen to maintain their monopoly over English foreign trade.[6] It therefore forced the English and Dutch investors to withdraw. Next, the East India Company threatened legal action on the grounds that the Scots had no authority from the king to raise funds outside the English realm, and obliged the promoters to refund subscriptions to the Hamburg investors. This left no source of finance but Scotland itself.[3]

Returning to Edinburgh, the Company of Scotland for Trading to Africa raised £400,000 sterling in a few weeks (equivalent to roughly £47 million today),[b] with investments from every level of society, and totaling about a fifth of the wealth of Scotland.[7][8] It was, for Scotland, a massive amount of capital.[9]

Scottish-born trader and financier William Paterson had long promoted a plan for a colony on the Isthmus of Panama to be used as a gateway between the Atlantic and Pacific – the same principle which, much later, would lead to the construction of the Panama Canal. Paterson was instrumental in getting the company off the ground in London. He had failed to interest several European countries in his project but, in the aftermath of the English reaction to the company, he was able to get a respectful hearing for his ideas.[9]

The Scots' original aim of emulating the East India Company by breaking into the lucrative trading areas of the Indies and Africa was forgotten, and the highly ambitious Darien scheme was adopted by the company. Paterson later fell from grace when a subordinate embezzled funds from the company, which then took back Paterson's stock and expelled him from the Court of Directors; he was to have little real influence on events after this point.[9]

Darien House, headquarters of the Company of Scotland in Edinburgh, now demolished

Many former officers and soldiers, who had little hope of other employment, eagerly joined the Darien project. Many of them were acquainted from serving in the army and several – Thomas Drummond, for example – were notorious for their involvement in the Massacre of Glencoe. In some eyes they appeared to be a clique and this was to cause much suspicion among other members of the expedition.[10] The first expedition of five ships (Saint Andrew, Caledonia, Unicorn, Dolphin, and Endeavour) set sail from the east coast port of Leith to avoid observation by English warships in July 1698,[c] with around 1200 people on board. The journey around Scotland while kept below deck was so traumatic that some colonists thought it comparable to the worst parts of the whole Darien experience. Their orders were "to proceed to the Bay of Darien, and make the Isle called the Golden Island ... some few leagues to the leeward of the mouth of the great River of Darien ... and there make a settlement on the mainland". After calling at Madeira and the West Indies, the fleet made landfall off the coast of Darien on 2 November.

The settlers christened their new home "Caledonia" declaring"...we do here settle and in the name of God establish ourselves; and in honour and for the memory of that most ancient and renowned name of our Mother Country, we do, and will from henceforward call this country by the name of Caledonia; and ourselves, successors, and associates, by the name of Caledonians." With Drummond in charge, they dug a ditch through the neck of land that divided one side of the harbour in Caledonia Bay from the ocean, and constructed Fort St Andrew, which was equipped with 50 cannon, but no source of fresh water. A watchhouse on a mountain completed the fortifications. Although the harbour appeared to be a natural one it later proved to have tides that could easily wreck a vessel trying to leave.[3] The colony threatened the Spanish Empire, especially its route for silver shipments. The feasibility of the scheme, especially for a country of Scotland's limited resources, has often been considered doubtful, although some modern authorities consider it might have possessed good prospects of success, if it had been given the support of England.[3][13]

"A New Map of the Isthmus of Darien in America, The Bay of Panama, The Gulph of Vallona or St. Michael, with its Islands and Countries Adjacent". In A letter giving a description of the Isthmus of Darian, Edinburgh: 1699.

Close to the fort they began erecting the huts of the main settlement, New Edinburgh, and clearing land to plant yams and maize. Letters sent home by the expedition created a misleading impression that everything was going according to plan. This seems to have been by agreement, as certain optimistic phrases kept recurring. However, it meant the Scottish public would be completely unprepared for the coming disaster.[3]

Agriculture proved difficult and the local Indians, though hostile to Spain, were unwilling to trade for the combs and other trinkets offered by the colonists. Most serious was the almost total failure to sell any goods to the few passing traders who put in to the bay. With the onset of summer the following year, malaria and fever led to many deaths. Eventually, the mortality rate rose to ten settlers a day.[7] Local Indians brought gifts of fruit and plantains, but these were appropriated by the leaders and sailors who mostly remained on board ships. The only luck the settlers had was in giant turtle hunting, but fewer and fewer men were fit enough for such strenuous work. The situation was exacerbated by the lack of food mainly due to a high rate of spoilage caused by improper stowing. At the same time, King William instructed the Dutch and English colonies in America not to supply the Scots' settlement so as not to incur the wrath of the Spanish Empire.[7] The only reward the council had to give was alcohol, and drunkenness became common, even though it sped the deaths of men already weakened by dysentery, fever and the rotting, worm-infested food.

After just eight months, the colony was abandoned in July 1699, except for six men who were too weak to move. The deaths continued on the ships, and only 300 of the 1200 settlers survived. A desperate ship from the colony had called at the Jamaican city of Port Royal, but it was refused assistance on the orders of the English government, which feared antagonising the Spanish. Those on the single ship that returned home found themselves regarded as a disgrace to the country and were even disowned by their families.[7] The Caledonia, with 250 survivors, including William Paterson and the Drummond brothers, made a desperate passage to New York, then just a small town of 5000, landing on 10 August. Four days later the Unicorn limped into New York harbour. When the Scots were told that two ships, the Olive Branch and Hopeful Binning, had already sailed to re-supply the now deserted colony, Thomas Drummond commissioned two sloops to aid their efforts in Darien.[14]

In August 1699, the Olive Branch and Hopeful Binning with 300 settlers arrived in Darien to find ruined huts and 400 overgrown graves. Expecting a bustling town, the ship's captains debated their next move. When the Olive Branch was destroyed by an accidental fire, the survivors fled to Jamaica in the Hopeful Binning, and landed in Port Royal harbour. The Scots were not allowed ashore, and illness struck the crowded ship.

On Sept 20, Thomas Drummond set sail from New York in the sloop Ann of Caledonia, (formerly the Anne), picking up another fully supplied vessel (The Society) on the way. They arrived in Darien to find the burnt timbers of the Olive Branch rotting on the shore.[14]

The Bay of Caledonia, west of the Gulf of Darien. New Edinburgh is on the isthmus on the right.

Word of the first expedition did not reach Scotland in time to prevent a second voyage of more than 1000 people.

A new company flagship, The Rising Sun, boasting 38 cannon, led the way, supported by The Duke of Hamilton, the Hope of Bo'ness, and a smaller vessel, the Hope. They sailed from the Clyde, on the west of Scotland, cutting out the perilous round-Scotland route taken by the previous ships.[15]

The second expedition arrived in Caledonia Bay on 30 November 1699 and found Thomas Drummond's New York sloops already there. Some men were sent ashore to rebuild the huts, which caused others to complain that they had come to join a settlement, not build one.[16]

Morale was low and little progress was made. Drummond insisted there could be no discussion, and the fort must be rebuilt as a Spanish attack would surely come soon.[16]

Drummond clashed with the merchant James Byres, who maintained that the Counsellors of the first expedition had now lost that status and had Drummond arrested. Initially bellicose, Byres began to send away all those he suspected of being offensively minded – or of being allegiant to Drummond. He outraged a kirk minister by claiming it would be unlawful to resist the Spanish by force of arms, as all war was unchristian. Byres then deserted the colony in a sloop.[16]

The colonists sank into apathy until the arrival of Alexander Campbell of Fonab, sent by the company to organise a defence. He provided the resolute leadership which had been lacking and took the initiative by driving the Spanish from their stockade at Toubacanti in January 1700. However, Fonab was wounded in the daring frontal attack and then became incapacitated with a fever.[16]

The Spanish force – who were also suffering serious losses from fever – closed in on Fort St Andrew and besieged it for a month. Disease was still the main cause of death at this time. The Spanish commander called for the Scots to surrender and avoid a final assault, warning that if they did not, no quarter would be given.[16]

After negotiations, the Scots were allowed to leave with their guns, and the colony was abandoned for the last time. Only a handful of those from the second expedition returned to Scotland.[16] Of the total 2500 settlers that set off, just a few hundred survived.[17][18]

The failure of the colonisation project provoked tremendous discontent throughout Lowland Scotland where almost every family had been affected. Some held the English responsible, while believing that they could and should assist in yet another effort at making the scheme work. The company petitioned the King to affirm their right to the colony. However, the monarch declined, saying that although he was sorry the company had incurred such huge losses, reclaiming Darien would mean war with Spain. The continuing futile debate on the issue served to further increase bitter feelings.

Hoping to recoup some of its capital by a more conventional venture, the company sent two ships from the Clyde, the Speedy Return and the Continent, to the Guinea coast laden with trade goods. Sea captain Robert Drummond was the master of the Speedy Return; his brother Thomas, who had played such a large part in the second expedition, was supercargo on the vessel. Instead of trying to sell for gold as the company's directors intended, however, the Drummond brothers had exchanged the goods for slaves, which they sold in Madagascar. Carousing with the buccaneers for whom the island was a refuge, the Drummonds fell in with pirate John Bowen, who offered them loot if they would lend him their ships for a raid on homeward bound Indiamen. Robert Drummond backed out of the agreement, only to have Bowen appropriate the ships while Drummond was ashore. Bowen burnt the Continent on the Malabar coast when he decided she was of no use to him, and he later scuttled the Speedy Return after transferring her crew to a merchant ship he had taken. The Drummonds apparently decided against returning to Scotland, where they would have had to explain the loss of the ships they had been entrusted with, as no more was ever heard of them.

The company sent out another ship, but she was lost at sea. Unable to afford the cost of fitting out yet another, the Annandale was hired in London to trade in the Spice Islands. However, the East India Company had the ship seized on the grounds that this was in contravention of their charter. This provoked an uproar in Scotland, greatly aided by the inflammatory rhetoric of the company's secretary, a relentless enemy of the English named Roderick MacKenzie. Fury at the country's impotence led to the scapegoating and hanging of three innocent English sailors.[19]

In July 1704, Thomas Green, the 25-year-old master of the Worcester, an English merchant ship, arrived at Leith. Mackenzie convinced himself that the ship was an East India Company ship that should be seized in reprisal for the Annandale. He succeeded in getting legal authority and Green – who had been given the command at 21 – watched as his ship's cargo was impounded and the sails, guns and rudder were removed over the next three months.

In December the crew was arrested for piracy. Although many in Scotland were delighted, it soon became clear to the directors of the Darien company that Mackenzie's charges were not supported by any proof so it seemed the men would be released. However, Mackenzie suddenly claimed to have ascertained from the crew of the Worcester that Green had drunkenly boasted of taking the Speedy Return, killing the Drummonds and burning the ship. Despite a total lack of evidence, Green and two of his crew, John Madden and James Simpson, were sent for trial in Edinburgh. The prosecution case, which was made in medieval Latin and legal Doric, was unintelligible to jury and accused alike. The defence advocates seem to have presented no evidence and fled after the trial. There was hardly anyone in Scotland who was disinterested but some jurors did resist bringing in a verdict of guilty. Nevertheless, the men were convicted and sentenced to death by hanging.

The Queen advised her 30 privy councillors in Edinburgh that the men should be pardoned but the common people demanded the sentence be carried out. Nineteen councillors made excuses to stay away from the deliberations on a reprieve, fearing the wrath of a huge mob that had arrived in Edinburgh to demand the sailors be put to death. Even though they had affidavits from London by the crew of the Speedy Return, who testified that Green and his crew had no knowledge or involvement in the fate of the ship, the remaining councillors refused to pardon the men. Green, Madden and Simpson were subjected to derision and insults by the mob before they were hanged. Green had complete faith that, as an innocent man, he would be reprieved and was still looking to the Edinburgh road for a messenger as the hangman placed the hood over his head.[19]

The failure of the Darien colonisation project has been cited as one of the motivations for the 1707 Acts of Union.[20] According to this argument, the Scottish establishment (landed aristocracy and mercantile elites) considered that their best chance of being part of a major power would be to share the benefits of England's international trade and the growth of the English Empire, so its future would have to lie in unity with England. Furthermore, Scotland's nobles were almost bankrupted by the Darien fiasco.

Some Scottish nobility petitioned Westminster to wipe out the Scottish national debt and stabilise the currency. Although the first request was not met, the second was and the Scottish Pound was given the fixed value of an English shilling. Personal Scottish financial interests were also involved. Scottish commissioners had invested heavily in the Darien project and they believed that they would receive compensation for their losses. The 1707 Acts of Union,[21] Article 15, granted £398,085 10s sterling to Scotland to offset future liability towards the English national debt.

^On signalling his approval for the creation of the Company of Scotland, the King declared before Parliament: "I have been ill-served in Scotland, but I hope some remedies may be found to prevent the inconveniences which may arise from this Act."[5]

Hidalgo, Dennis R. (2001), "To Get Rich for Our Homeland: The Company of Scotland and the Colonization of the Darién", Colonial Latin American Historical Review10 (3), ISSN1063-5769

Insh, George Pratt, ed. (1924), Papers Relating to the Ships and Voyages of the Company of Scotland Trading to Africa and the Indies, 1696–1707, Edinburgh: Scottish History Society, Edinburgh University Press

Storrs, Christopher (1999). "Disaster at Darien (1698–1700)? The Persistence of Spanish Imperial Power on the Eve of the Demise of the Spanish Habsburgs". European History Quarterly29 (1): 5–38. doi:10.1177/026569149902900101.